Uncork wine's potential

Related tags Wine Chardonnay Waverley

Waverley's latest wine survey has revealed the trends of the sector. Ben McFarland reports.Pubs are still not living up to the grape expectations of...

Waverley's latest wine survey has revealed the trends of the sector. Ben McFarland reports.

Pubs are still not living up to the grape expectations of their customers, according to the latest wine research by Waverley.

The wine and spirits arm of Scottish & Newcastle has unveiled the latest installment of its Face Value project - a where, what, why and how much look at the UK wine sector in both the on and off-trade.

Launched in 2000, the Face Value initiative divided wine drinkers into half a dozen distinct "consumer types", ranging from young carefree Chardonnay Girls to Classic Connoisseurs who know everything from Alsace to Zinfandel and all that's in-between.

This year, Waverley has gained a deeper insight into the minds of these half dozen drinkers and compared its findings with those last time round. It is also able to shed light on the rationale behind wine buying in the off-trade having undertaken a separate research project in conjunction with Scottish Courage and Diageo.

Although the results apply to both the on-trade and the take-home sector, they remain extremely pertinent for licensees as the consumers that browse up and down the supermarket aisle and those that visit the pub are - would you believe it - one and the same.

The gap between the on and the off-trade is still wider than it should be, however, and the pub business is still dragging its heels when it comes to promotion, choice and education.

While wine sales in pubs, bars, hotels and restaurants are growing at 10 per cent, double that of the take-home sector, the on-trade still constitutes less than a fifth of the entire UK wine category.

"Pubs are missing out on huge untapped potential," said Paul Waddingham, category manager for the Waverley Group. "In the take-home sector there is all this choice, promotion and education but licensees need to take a look at their business and ask themselves whether they're really giving the customer what they want."

It is generally accepted that the pub market is around two years behind its take-home equivalent but licensees can help close that gap and steal a march on their competitors by gaining an insight into the minds of the wine drinker.

Country of origin

New World wines are continuing to blaze a trail in the take-home sector but when it comes to the on-trade, things remain a lot more traditional with the old world still making up approximately 70 per cent of wine sales.

France is still a firm favourite among licensees but its share is being eroded by a consumer shift towards the New World (up 18 per cent) and also the emergence of European rivals.

Italy, for one, has shown huge growth in the last 12 months, driven primarily by the popularity of pinot grigio - a wine that is being widely dubbed "the new chardonnay".

Having enjoyed a meteoric rise in recent years, Australian wine seems to have reached a plateau and has failed to improve its percentage share in the on-trade. New World wines, however, are getting more of a foothold in pubs and bars than in hotels and restaurants. Brands

The news that brands are getting bigger and growing share within the entire wine market will raise few eyebrows.

Wine brands are growing at 27 per cent versus a market increase of nine per cent and Waverley expects this rate to reach 47 per cent in the next five years.

Just under half of the 20,000 consumers surveyed said they chose a particular wine on the basis that it was a recognised and trusted brand or style.

When referring to brands, however, Waverley includes not only brand names like Jacob's Creek or E&J Gallo but also country of origin as well as grape variety such as merlot, chardonnay and pinot noir.


Although 90 per cent of the wine sales in the off-trade are below £5 (equivalent of around £12 in the on-trade) there has been a significant shift to the £5.99 price point in the last year.

This trading-up by the consumer has been driven primarily by New World wine-dominated price promotions. As a consequence, in the last 12 months there has only been a one pence increase on the average price of a bottle of wine in the off-trade.

"Some of the higher price wines are now being promoted in an attempt to get people to trade up and you can get better wine for your buck. It means that, when compared with inflation, the consumer is getting an even better deal in the off-trade," added Paul. "This makes the need for licensees to improve their wine offer all the more pressing. Pubs need to get wine sorted out if they're going to coax people out of their home."

What's happening in the on-trade?

  • Visibility

When it comes to shouting about their wines and letting their customers know what they've got to offer on the wine front, licensees have still got work to do.

More than 40 per cent keep wine in the fridge, 38 per cent on the shelf showing the label and 26 per cent even have a presence on the bar with wine on draught.

However, nearly one in five pubs fail to put their merlots and chardonnays where anyone can see them and only a third of licensees advertise their range in the outlet.


Thirty per cent of all wine drunk at home is bought on price promotion and between 60 to 70 per cent of all volume in the take-home sector is promotion driven.

Only one in 20 on-trade outlets run a promotion with leased/tenanted and independent pubs particularly off the pace.

A preoccupation with margins may be to blame, but licensees can make more money by selling additional bottles of wine at a moderate price point. "The consumer wants to see deals on wine to show value," said Paul Waddingham of Waverley.

"There's a perception that wine is generally overpriced and this can be dispelled by running promotions. Wine is becoming an everyday drink and people want value for money."


The range of wines in pubs remains a grape-related grievance for the wine industry. While a quarter of outlets stock more than 10 wines, the average range is between three and five while, disappointingly, a third of the outlets offer two wines or less - that'll be a red and a white then!

What's more, nearly half of all outlets only review their range on an annual basis or even less frequently which may explain why new world wines have enjoyed less success in the on-trade.

In terms of value and volume, Waverley claims that Australian wine is bigger than gin in the on-trade but over half of outlets don't even stock a wine from Down Under.

Related topics Wine

Property of the week


£ 60,000 - Leasehold

Busy location on coastal main road Extensively renovated detached public house Five trade areas (100)  Sizeable refurbished 4-5 bedroom accommodation Newly created beer garden (125) Established and popular business...

Follow us

Pub Trade Guides

View more